UPI continues to remain free for consumers, while MDR (Merchant Discount Rate) has been introduced on select UPI merchant transactions.
Consumers will not be charged for UPI payments, whether they are sending money to family and friends or paying merchants at stores, local markets or street vendors. Merchants also cannot pass MDR charges on to customers.
For merchants, UPI payments up to ₹2,000 will continue to attract zero MDR, covering approximately 96% of merchant transactions. Small merchants receiving up to ₹1 lakh per month through UPI QR codes in their bank accounts will also continue to receive payments without MDR.
Eligible merchant transactions above ₹2,000 will attract 0.4% MDR, with transactions of ₹75,000 and above subject to a maximum MDR of ₹300 per transaction.
For essential services such as fuel, education, insurance, railways, telecom and utilities, including electricity, water and piped natural gas, payments above ₹2,000 will attract a flat MDR of ₹5 per transaction, while payments below ₹2,000 will remain exempt.